Question

Managerial accounting provides performance reports to internal users. Which of the following is considered an advantage of performance reports?

a. Performance reports allow management to identify any large amounts of scrap materials or employee downtime.
b. A report could analyze the potential efficiencies and dollar savings of purchasing computerized equipment to speed up the production process.
c. A report could analyze how many units need to be sold to cover operating costs and expenses and used to set monthly selling targets and bonuses for sales personnel.
d. All of these choices are correct.

Answer 1

In managerial accounting, performance reports offer several advantages, such as identifying inefficiencies, determining cost savings from new technologies, and aiding in setting sales targets and incentives. The correct answer is that all provided options are correct (option d).

Step-by-step explanation:

Managerial accounting plays a crucial role in the internal performance management of a company. Performance reports, as part of this accounting branch, offer several advantages to the management team.

Some of these include: identifying scrap materials or employee downtime, enabling a data-driven approach to optimize efficiency; analyzing potential efficiencies and cost savings related to the acquisition of new technologies; and providing a basis for setting sales targets and incentives, by determining how many units need to be sold to cover costs and expenses.

Therefore, the correct option from the given choices would be: d. All of these choices are correct. Each highlighted aspect provides an actionable insight that can contribute significantly to the company's operational efficiency and profitability.